Obama administration taking tougher stance on airline penalties

Since President Obama took office, the Transportation Department’s aviation enforcement office has almost doubled fines on the aviation industry. AirTran paid a $20,000 federal fine for promoting $39 fares that cost $44.﻿

That was in May alone. President Barack Obama's Transportation Department has almost doubled fines on the aviation industry since taking office from the final two years of George W. Bush's presidency, federal data show.

The administration has faulted airline actions from bumping passengers to flawed plane inspections. The growing fines weigh on carriers working to contain costs after reporting their first collective profit in 21/2 years in the second quarter, said Kenneth Quinn, a former general counsel with the Federal Aviation Administration.

"The pendulum has swung pretty hard," said Quinn, a partner with Pillsbury Winthrop Shaw Pittman in Washington. "Multimillion-dollar fines can negate a good quarter."

The Transportation Department's aviation enforcement office, which oversees advertising, passenger rights and disclosure of data on carrier performance, levied $4.77 million in penalties since Obama took office, an 84 percent jump from $2.59 million in 2007-2008, according to department data.

Separately, the Federal Aviation Administration, the department's unit that regulates safety, proposed $77.4 million in fines in the 12 months ended Sept. 30, Obama's first full fiscal year in office. That is up 66 percent from $46.7 million Bush proposed for the year ended Sept. 30, 2008, FAA data shows. Most cases involving FAA fines proposed under Obama are pending. The Obama administration's more confrontational approach endangers a tradition of cooperative efforts by the government and airlines to track down and fix safety defects, said James May, president of the Air Transport Association, a Washington trade group for airlines.

"I'm concerned the foundation of the world's best aviation safety record, built on a cooperative spirit, is being replaced by an enforcement-oriented, punitive approach," May said.

Among the group's members are United Continental Holdings, Delta Air Lines, American Airlines and Southwest Airlines. All four carriers referred requests for comment to the association. The carriers' complaints echo those of business leaders in other industries who have said Obama is too aggressive on taxes and regulation. "This administration has not been friendly to business," said Jack Welch, former chief executive officer of General Electric.

AirTran Holdings, based in Orlando, paid a $20,000 fine in May after promoting one-way fares as low as $39 in a "Leave the Blizzard Behind Sale" news release. "The lowest available fare for the sale was $44," the Transportation Department said in an order. Atlanta-based Delta paid $40,000 for failing to display taxes and fees for fares on its website, the department found. Continental paid $100,000 for treating multiple complaints by individuals with disabilities as a single grievance for reporting purposes.

"We are definitely focused on the rights of consumers," Transportation Department General Counsel Robert Rivkin said in an interview. "This is a specific set of issues that we just feel really strongly about."

"This administration is simply doing its job," said Kevin Mitchell, chairman of the Business Travel Coalition. "The days of stonewalling and too-cozy relationships are over."